r/options • u/LilCauliflower • 1d ago
IBIT Long - Bitcoin divergence from Nasdaq?
As the stock market flash crashed this week, crypto held very nicely. One of the few times I've seen bitcoin diverge from the Nasdaq on such a strong move. This coupled with the recent decline in most cryptocurrencies in the past 3-4 months gives me some confidence in opening a long position on IBIT. I plan on executing this sometime on Monday.
Anyone else have similar thoughts on bitcoin?
I'm curious to hear what some of you think of this.
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u/Riptide34 1d ago
First, not to be pedantic, but this was not a "flash crash". It was a good ole fashioned "normal" crash. Yes, I know the oxymoron in calling a crash "normal".
I was surprised that BTC didn't go to a correlation of 1 (with SPX) on Friday, especially since it's rolling 3-month correlation has hovered around .7 or so until then. Whether that disconnection holds, I don't know. Perhaps it will be like gold, which usually holds up during a recession. I have my doubts, but we just don't know.
I wouldn't mind establishing some long IBIT, either through a short put or just buying shares. It wouldn't be a big percentage of my portfolio though, because at the end of the day it is basically a "hyper risk" asset class.
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u/Baozicriollothroaway 1d ago
lost 800 bucks trying to long puts on BTC, it was too strange it didn't go along as it has done throughout this year.
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u/sam99871 1d ago
I was shocked that IBIT didn’t crash with the market. It has seemed to act like just another risky asset but last week it didn’t. Is it possible people are starting to view bitcoin as a safe harbor from the US economy?
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u/dip-the-buy 22h ago
Are you nuts? Bitcoin crashed ~25% from recent "Trump trade" high. It crashed 25%, and not 50%, like during last tariff war, only because MAGA pumps crypto to its redneck voters.
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u/Unique_Name_2 21h ago
It went down with the derisking slow decline, with everything equity sliding. Then, during this last massive dump, its been fine.
Imo because it is policy immune. Im a crypto hater but i gotta admit, it makes a bit of sense as safety from US equities.
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u/Plantastic24 1d ago
Lots of articles about BTC decoupling from stocks. Who would have thought BTC would become a 'U.S. Isolation Hedge' and safe haven :)
https://finance.yahoo.com/news/crypto-outperforms-nasdaq-btc-becomes-144707301.html
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u/Key_Confidence_5414 14h ago
I bought IBIT put on the 1st of April, btc on Friday went up, but the put price I bought is stable. I thought BTC is strong so I sell my IBIT put. But thinking it again, although BTC up on Friday, IBIT put did not went down, so that means volatility is still high and there is still expectation IBIT to drop. I'm thinking about buying IBIT put again
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u/DJ_Mimosa 1d ago
Bitcoin is down about 25% from ATHs, while SPY is flirting with 20%. That caught my eye as well, that the equity market has been almost as volatile as crypto.
I find crypto tends to lead to the market, so my read has been that the S&P is about to stabilize a bit.
It’s also possible that Friday’s massacre was at least half due to hedge funds dumping losers as they were getting margin called from Thursday’s massacre. And they don’t view bitcoin as a loser right now.
Options wise, I would consider wheeling the hell out of IBIT right now. A weekly strike that’s a full 10% below spot pays a premium that annualizes to 50%. I just don’t see a 10% bitcoin drop inside a week with how relatively stable it’s been. And even if that were to occur, I’d maybe buy a long dated put at the same strike to insure myself against losses, pay off that premium over a few weekly wheel cycles, and continue.
MSTR has also performed extraordinarily well, and its premiums or even juicier. I can’t wrap my head around their convoluted business model, but I think they might be responsible for bitcoin stability too.